Thursday, December 5, 2013
5:56 PMUkraine, under Russian pressure, is no-show to sign gas import deal
- Ukrainian officials failed to show to sign a deal that could open up a natural gas supply route via Slovakia, WSJ reports, raising concerns that Ukraine was walking away from an agreement the European Union spent months brokering.
- The deal would have opened up a major gas supply route to Ukraine that could have greatly reduced the country's dependence on Russian supplies, but Pres. Yanukovych's government had warned it may put the deal on hold, citing trade pressure from Russia.
- Russia's Gazprom (OGZPY) meets a quarter of the EU's gas needs, the bulk of which flows via Ukraine, and supplies the vast majority of Ukraine's energy needs.
3:49 PMBass: Real move in yen hasn't even begun
- "This is just the beginning. It's not the real move," says Kyle Bass (speaking to Steven Drobny) of the move down in the yen (FXY +0.6%) this year. "The real move happens when it runs away from the authorities and they lose control." On the record as saying dollar/yen goes to ¥200, Bass says if he's right about Japan, it will go much further than that. ¥500? No, but once currencies get moving in a certain direction, they often swing way too far.
- Wake me when dollar/yen goes to ¥350, says Bass when asked at what point he becomes a buyer in Japan.
- Japan ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, SCJ, YCL, JSC, JPP, JGBL, ITF, DXJS, JGBT, JPNL, JPNS, FJP
12:34 PMAnheuser-Busch InBev to expand packaging innovation
- Anheuser-Busch InBev (BUD -0.7%) plans to spend $10M to upgrade its brewery in Williamsburg, Virginia.
- The intriguing part of the company's announcement is that the investment will go in part to improve "innovative" packaging capabilities.
- The beer industry which has been nearly tapped out on innovation has turned to can and bottle variety for marketing spins.
11:34 AMState Street Launches Beyond BRIC ETF
- State Street's (STT) Global Advisors unit launched the SPDR MSCI EM Beyond BRIC ETF (EMBB) this morning to meet the ever growing investor interest in underplayed emerging markets.
- With an expense ratio of 0.55%, this new ETF will bypass the now crowded BRIC countries (Brazil, Russia, India and China), instead investing in developing market stocks with less outside exposure; Chile, the Czech Republic and Indonesia to name a few.
- Another Beyond BRIC ETF (BBRC) was launched just over a year ago with a net expense ratio of 0.58%.
- Emerging Market ETFs: EEM, VWO, EDC, EDZ, SCHE, IEMG, EEV, PIE, ADRE, EUM, EET, GMM, EEME, EMCR, DBEM, EWEM, FEM, EMLB, EMSA, EMFT, EMDR
11:12 AMEcopetrol to ramp up output in promising Colombian oil field
- Colombian's state-controlled oil company Ecopetrol (EC +1.9%) says it is ready to start ramping up production in its promising Eastern Caño Sur oil block as part of its efforts to boost production by a third over the next two years.
- EC says the block is commercially viable and will see production rise to 25K bbl/day by 2016 from the current 1,700; investment will total $656M through 2018, with ~135 wells expected to be dug.
- EC has said its 2012 production of 754K bbl/day will reach 1M by 2015, as it pours money into exploration and drilling.
9:07 AMEuro shoots higher on Draghi comments
- Exchange rates are a matter of common concern, but they are not a target of monetary policy, says Mario Draghi at his press conference following the ECB policy meeting today (no change). The goal, he says, is price stability.
- On negative interest rates, Draghi says the topic was brought up, but only got a "brief" discussion.
- The borderline hawkish comments are enough to send the euro higher by about 75 pips, now +0.25% on the session and buying $1.3632. FXE +0.3% remarket.
- Euro ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
8:49 AMEni's CEO is the first to meet with Iran oil minister
- Paolo Scaroni of Italy's Eni met with Iranian Oil Minister Bijan Zanganeh today, the first western oil CEO to meet publicly with the minister since last month's nuclear deal.
- The talks came after Zanganeh named Eni as one of the western companies he hoped would invest in Iran's energy sector, and covered debts Eni is owed by Iran for previous investment and future terms for foreign companies to help revive Iran's oil and gas industry.
- In addition to Eni, the minister had mentioned Chevron (CVX), ConocoPhillips (COP), BP, Shell (RDS.A, RDS.B), Total (TOT) and Statoil (STO) as foreign companies that could help develop Iran's oil fields.
6:57 AMGlobal air traffic saw solid growth in October
- The IATA reports global air traffic rose 6.6% in October to show an acceleration from September's mark.
- The markets in China and Russia paced the gains, up 12.3% and 11.4% respectively, while airlines in Latin America recorded the best improvement in load factor on tight capacity.
- Though airlines in North America only saw a moderate 3.6% rise in international travel, indications are that the business environment is improving.
- Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, IAG, DLAKF, AIDIF, QUBSF.
5:36 AMStock markets await central bank announcements
- Asian equities mostly fall while European shares and U.S. stock futures struggle for direction amid more taper talk following a strong ADP jobs report yesterday, and ahead of monetary policy announcements from the Bank of England and the European Central Bank later today.
- The Nikkei fell 1.5% following yesterday's sharp fall but after closing at a six-year high earlier this week. A strengthening of the yen and further profit-taking might have had something to do with today's decline.
- Hong Kong -0.1%, China -0.2%, India +1.2%.
- London flat, Paris flat, Frankfurt +0.1%, Milan -0.2%, Madrid +0.1%.
- U.S. stock futures: Dow -0.1%. S&P flat. Nasdaq +0.1%
5:26 AMChina bans banks from Bitcoin trading, triggering selloff
- Bitcoin sells off after the PBOC bars financial institutions from handling Bitcoin transactions
- Bitcoin isn’t a currency with “real meaning” and doesn’t have the same legal status as a currency, PBOC says. Private individuals remain free to trade Bitcoins.
- The move is likely tied to Beijing's desire to regulate the yuan: “It represents an unofficial leakage to the current monetary system and trades globally. It is difficult to regulate and could be used for money laundering. I think the central bank is right to make this move,” one analyst says.
- Bitcoin is down 21.8% to $930 after trading as high as $1,240 overnight.
4:33 AMOPEC maintains crude output cap at 30M bpd
- As expected, OPEC has agreed to keep its daily oil production limit at 30M barrels, due to uncertainty about the outlook for supply and demand.
- However, there are factors that could force prices to fall from the relatively stable level of $100 a barrel.
- Iran plans to increase output as quickly as possible if and when international sanctions are lifted. The country produces 2.7M bpd but wants to return to its former level of 4M bpd.
- Meanwhile, U.S. shale supply continues to rise, while new oil from Kurdistan could boost Iraqi exports.
4:18 AMWTO credibility at stake as nations struggle to reach deal
- U.S. and European officials still hope a deal can be struck at a meeting of the World Trade Organization's (WTO) 159 members in Bali even though India has said it won't compromise on subsidizing food for the poor.
- A draft agreement would let India provide the subsidies for another four years, but the country wants to be able to continue its policy indefinitely.
- The failure to finalize a pact this week could seriously damage the WTO's stature, officials have warned. The agreement has already been weakened to the "low-hanging fruits" of the beleaguered Doha round of talks, which have been continuing for 12 years.
4:01 AMJapan OKs ¥18.6T stimulus package
- As flagged, Japan's cabinet has approved an ¥18.6T ($182B) stimulus plan to offset a hike in sales tax that is due to go into effect in April.
- However, there's a bit of smoke and mirrors in play, as much of the package includes investment that was already scheduled.
- The scheme has raised concerns that Japan remains addicted to using stop-gap measures to run economic policy.
- Still, the cabinet expects the measures to add 1% point to GDP and create around 250,000 jobs, although economist Hiroshi Miyazaki isn't as optimistic.
- The yen is -0.3% at ¥102.05 and the Nikkei -1.5%.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, SCJ, YCL, JSC, JPP, JGBL, ITF, DXJS, JGBT, JPNL, JPNS, FJP
2:27 AMMoody's ups outlook on Spain to stable
- Moody's has joined S&P and lifted its outlook on Spain to stable from negative.
- Moody's cited three reasons for its decision: indications of a "sustained rebuilding" of the economy and an improved outlook for the medium term; a "material decrease" in risks to Spain's market access and to contagion from other parts of the eurozone; and a significant fall in contingent liabilities in the banking sector.
- The agency affirmed its rating on Spain at Baa3.
- S&P increased its outlook on Spain to stable from negative last week and reiterated the country's rating at BBB-, the lowest investment grade. (PR)
- ETF: EWP